Demonetisation: People stock up on medicines to get rid of old notes

AWACs found that anti-diabetic, cardiovascular and BP drugs have shown a significant increase in sales as compared to corresponding period of Oct.DIVYA RAJAGOPAL | ET Bureau | November 29, 2016, 08:03 IST

MUMBAI: Three weeks after the November 8 demonetisation scheme, Indians are hoarding medicines in exchange of old notes as pharmacy chains have become one of the last stations that accept the old Rs 500 and Rs 1,000 notes as legal tender.

Chemists and pharmacy chains across India have witnessed a spike in sales of chronic medicines, according to a data crunching exercise by consultancy firm AWACS on the impact of demonetisation on drug sales.

The consultancy firm analysed 2 per cent of the total pharma market as a sample size since the demonetisation drive began and dividing the segment into acute, chronic and subchronic segment, it looked at seven weeks sales starting October 11.

AWACs found that chronic therapy, which includes anti-diabetic, cardiovascular and blood pressure drugs have shown a significant increase in sales as compared to corresponding period of October. The trend shows that since November 1, the sales of drugs in this therapy grew from Rs 14.1crore to Rs 16.8 crore.

“This clearly shows some chronic patients have used old notes to prepone their medicine supply for 2-3 months. Overall chronic therapy may gain 10-15 per cent additional sales in November,” said Ameesh Masurekar, Director of AWACS. Dharmil Seth, cofounder of PharmEasy, a e-pharmacy startup, has seen similar trend with 20-25 per cent of their customers advancing purchases.

“I think, fearing the cash crunch, people were concerned if they will have money to buy medicines, so that’s why we saw many of the regular buyers bought before time,” Seth explains.

However, as a policy, PharmEasy restricts preponed purchase of medicines unless the customers have a valid reason. But on the other side, as patients hoard chronic medicines, the sale of acute therapy drugs like regular antibiotics, among others, which makes up nearly 60 per cent of total Indian pharma market, has seen a sharp dip.

Masurekar expects the sales of acute therapy to drop by 20 per cent in November.

“It looks like people have delayed going to the doctor for their “small illness” in order to save cash.

This would have extended to their decision of buying medicines too,” Masurekar said. He is expecting drug companies with high share of acute portfolio to see a sharper dip in sales this month.

The sales of drugs in this category dropped from Rs 27. 1 crore on November 8, the day demonetisation was announced after markets closed, toRs 21.6 crore on November 22.